pliance with the orders of the Treasury De- erred in its disposition of the counterclaim.[137] partment, restricted its catch to 7,500." In *The seal fisheries of the Pribiloff islands other words, it appears that both parties re- were а branch of commerce and their garded the Secretary of the Treasury as au- regulation involved the exercise of power as thorizing the taking of 7,500 skins in the a sovereign and not as a mere proprietor. year 1893. Such governmental powers cannot be contractUnder the law of 1870 and the various sec-ed away, and it is absurd to argue that in this tions of the Revised Statutes the power was instance there was any attempt to do so, or expressly reserved to the government to make any sheer oppression or wrong inflicted on the whatever restrictions of the business it might lessee by the government in the effort to prosee fit to make; the lease recognized this to tect the fur seal from extinction. the full extent; and it was, moreover, ex- The privilege leased was the exclusive pressly stipulated that the company was not right to take fur seal, but it was subject, and to kill or permit to be killed a greater num-expressly subjected, from the beginning, to ber than the Secretary might authorize. The whatever regulations of the business the Unitcompany was offered 7,500 skins for 1893: jed States might make. If those regulations took them; paid the amount fixed by the reduced the catch, the company was protected Secretary under the lease for compensation by a reduction of the rental, and paid taxes to the natives for taking and loading the and per capita only on the number taken. skins, and subsequently tendered the sum of The other expenses to which it bound itself $23,789.50 as, according to its computation, were part of the risk of the venture. The the full amount due under the lease. These catch for 1893 was lawfully limited to 7,500 [136]particular seals *were killed by the govern- and the company accepted and disposed of ment agent, but notice of the killing, from the skins. It cannot now be heard to intime to time, was given to the company, and sist that that limitation was in breach of the the company requested to select the skins obligations of the government, for which, it desired, which it did. The government did though still claiming the contract to be outnot regard the lease as broken, but proceeded standing, it is entitled to recover damages. under it, and delivered the 7,500 skins as full The judgment of the Circuit Court is reperformance of the covenant on its part, for versed, and the cause remanded with a directhe privilege of taking the seals was subject tion to enter judgment in favor of the Unitto such limitation on the number as the gov-ed States for $76,687.50, with interest from ernment believed it necessary to impose; and the company acquiesced in that view by taking the 7,500 skins without dissent.

the first day of April, 1894; and to enter
judgment in favor of the United States on the

It was after this that the question arose, not of breach of contract, but as to what sum, if any, was due from the company under PULLMAN'S the lease more than it had tendered. Was the company entitled to a reduction on what it had agreed to pay, and, if so, how much?

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(See S. C. Reporter's ed. 138-161.)


3. Finally, the company claims that the United States are liable to it in damages to the extent of $287,725 for skins it could have taken during the season of 1893, without un-The right to appeal-when a complainant in reasonable injury to or diminution of the seal herd, and which the United States prevented it from doing; and that it can avail itself of this claim in this suit by way of recoupment and counterclaim.

The circuit court rejected this counterclaim on the ground that the claim had not been presented and disallowed by the accounting officers of the Treasury, and dismissed it, not on the merits, but without prejudice. The company prosecuted its writ of error from the circuit court of appeals for the second circuit, and assigned as errors, among others, that the circuit court erred in adjudging that its claim for damages was not duly presented; that the court did not allow its counterclaim; and that judgment was not directed in favor of the company. From what we have already said it will have been seen that we are of opinion that the company cannot maintain this claim for damages, and that, assuming that the claim had been duly presented and disallowed, and that, if meriorious, it might be availed of by way of recoupment in this action, the circuit court


equity may dismiss his suit-prejudice to
defendant-review of motion to discon-
tinue when leave to discontinue may be
denied cross bill for affirmative relief—
property transferred under illegal con-
tract-right to recover-measure of value
-value of contracts and patents trans-
ferred earnings of the property-loss by
breaking up of business.

The right to appeal directly to this court

from the circuit court because of a constitu

NOTE. As to what acts and contracts of a corporation are ultra vires; contracts in viola tion of statute or public policy; executed contracts; instances; estoppel or ratification of transactions ultra vires, see note to Central Transp. Co. v. Pullman's Palace Car Co. 35: 55. As to what laws are void as impairing obli gation of contracts,-see note to State, Ranger, v. New Orleans, 26: 132.

As to what remedy at law will prevent rem

edy in equity, see note to Tyler v. Savage,


As to account stated; bar to bill in equity, defenses must be made in original action,-see note to Chappedelaine v. Dechenaux, 2: 629.

tion of authority to support it is unneces


Examining, then, the questions we have stated in their inverse order, we proceed to inquire whether he commissioners of the District of Columbia had the power to enter into a contract of the nature of that under consideration. The solution of this inquiry requires a brief examination of the statutes, from which alone the powers of the commissioners of the District are derived.

By chapter 337, act of June 20, 1874, "An Act for the Government of the District of Columbia, and Other Purposes". (18 Stat. at 1. 116), the commission provided for in § 2 was vested with the power and authority of the then governor or board of public works of the District, except as thereinafter limited, and it was provided that "said commission, in the exercise of such power or authority, shall make no contract, nor incur any obligation, other than such contracts and obligations as may be necessary to the faithful administration of the valid laws enacted for the government of said District, to the execution of existing legal obligations and contracts and to the protection or preservation of improvements existing, or commenced and not completed, at the time of the passage of this


and prisons belonging or controlled wholly or
in part by the District of Columbia, and
which are now by law supported wholly or
in part by the United States or District of
Columbia; and also the expenses of the Wash-
ington aqueduct and its appurtenances; ani
also an itemized statement and estimate of
the amount necessary to defray the expenses
of the government of the District of Columbia
for the next fiscal year." Of the estimates
as finally approved by Congress, the act pro-
vided that 50 per cent should be appropriated
for by Congress, and the remaining 50 per
cent assessed upon the taxable property and
privileges in the District other than the prop-
erty of the United States and of the District
of Columbia. In the 5th section of the act
provision was made for the letting by con-
tract, after due advertisement, of all work of
repair on streets, etc., where the cost would
exceed $1,000, and *it was also in said section[175]
stipulated that "all contracts for the con-
struction, improvement, alteration, or re-
pairs of the streets, avenues, highways, alleys,
gutters, sewers, and all work of like nature
shall be made and entered into only by and
with the official unanimous consent of the
commissioners of the District, and all con-
tracts shall be copied in a book kept for that
purpose and be signed by the said commis-
sioners, and no contract involving an expen-
diture of more than $100 shall be valid until
recorded and signed as aforesaid."

By 37 of chap. 62, act of February 21,
1871 (16 Stat. at L. 427), it was provided as

"All contracts made by the said board of public works shall be in writing, and shall be signed by the parties making the same, and a copy thereof shall be filed in the office of the secretary of the District, and said board of public works shall have no power to make contracts to bind said District to the payment of any sums of money except in pursuance of appropriations made by law, and not until such appropriations shall have been made."

By chapter 180, act of June 11, 1878, "An Act Providing a Permanent Form of Government for the District of Columbia" (20 Stat. at L. 102), the District and the property and persons therein were made subject to the provisions of the act, "and also to any exist-follows: ing laws applicable thereto not hereby repealed or inconsistent with the provisions of this act." The commissioners provided for in the act were, by § 3, vested with all the pow[174]era, rights,duties, and privileges lawfully exercised by, and all property, estate, and effects vested in, the commissioners appointed under the provisions of the act of June 20, 1874, and were given power, subject to the limitations and provisions contained in the act, to apply the taxes or other revenues of the District to This section is deemed to be applicable to the payment of the current expenses thereof, the present commissioners. Comp. Stat. D. to the support of the public schools, C. §§ 30, 31, pp. 201, 202. So, also, by § 15 the fire department, and the police. of the act of 1871 (16 Stat. at L. 423, chap. It was expressly enacted, however, in the same section, that the commissioners in the exercise of the duties, powers, and authority vested in them "shall make no contract, nor incur any obligation, other than such contracts and obligations as are hereinafter provided for and shall be approved by Congress." In the same section it was further provided that the commissioners should annually submit to the Secretary of the Treasury, for his examination and approval and transmission by him to Congress, a statement "showing in detail the work proposed to be undertaken by the commissioners during the fiscal year next ensuing, and the estimated cost thereof; also the cost of constructing, repairing and maintaining all bridges authorized by law across the Potomac river within the District of Columbia, and also all other streams in said District; the cost of maintaining all public institutions of charity, reformatories,

62), it was provided that the legislative assembly should not "authorize the payment of any claim or part thereof, hereafter created against the District under any contract or agreement made, without express authority of law, and all such unauthorized agreements or contracts shall be null and void.”

Section 13 of the act of June 1, 1878, embodies the 2d section of the joint resolution approved March 14, 1876 (19 Stat. at L. 211, § 2), which made it a misdemeanor for any officer or person to increase or aid or abet in increasing the total indebtedness of the District.

Under the statutes of 1874 and 1878, above referred to, it has been held that the District of Columbia still continued to be a municipal corporation, and that it was subject to the operation of a statute of limitations (Metropolitan Railroad Co. v. District of Columbia, 132 U. S. 1 [33: 231]), and was also liable for

tions, the Pullman Company agreed to pay | property, contracts, and rights of the said deannually the sum of $264,000 during the en- fendant, the Central Transportation Comtire term of ninety-nine years, in quarterly pany, and including a covenant on the part payments, the first quarter's payment to be of said defendant corporation not to transact made on the 1st of April, 1870. during the existence of said lease any of the [140] *From the time of the execution of the con- business for the transaction of which it was tract its terms were carried out, and no par- incorporated, was never legally valid beticular trouble occurred between the compa- tween the parties thereto, but was void for nies for about fifteen years. During this time the want of authority and corporate power and up to the 27th day of January, 1885, the on the part of the defendant to make the Pullman Company paid to the Central Com- said contract of lease, and because the same pany, as rent under the contract, the sum of was in violation of the charter conferring the $3,960.000, without any computation of in- corporate powers of said defendant, and of terest. About or just prior to January, 1885, the purpose of its incorporation, as by the said differences arose between the companies. charter, to which, for greater certainty, refThe Pullman Company claimed the right to erence is made, your orator is advised it will terminate the contract under the eighth appear; that the said contract of lease was clause thereof, or else to pay a much smaller never susceptible of being enforced in law by rent. The merits of the controversy are not your orator against said defendant, and canmaterial. not therefore be construed and held to conThe two companies not agreeing, and the tinue in force and obligatory upon your oraPullman Company refusing to pay the rent tor; and that your orator can be under no stipulated for in the lease, the Central Com- other legal obligation or equitable duty to pany brought successive actions to recover the defendant than to return such of the the instalments of rent accruing. In one of property assumed to be demised as is capathem the Pullman Company pleaded the ille-ble of being returned, and to make just comgality of the lease, as being ultra vires, the charter of une Central Company. The plea prevailed in the trial court, and upon writ of error the judgment upholding this defense was, in March, 1891, sustained in this court. Central Transportation Company v. Pullman's Palace Car Company, 139 U. S. 24 [35: 55].

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pensation for such other of the said property
as under the said contract of lease it ought
to make compensation for, which it is will-
ing and now offers to do."

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In the prayer for relief it was also asked"That the court may consider and decree whether said contract of lease was not made without authority of law on the part of the After the bringing of several actions for in- defendant and in excess of its corporate stalments of rents by the Central Company powers and in violation of its corporate duand before the question of ultra vires had ties, so as not to be enforceable against your beeu argued in this court, the Pullman Com- orator beyond the obligation of your orator pany on the 25th day of January, 1887, com- to make return of or just compensation for menced this suit by the filing of its bill the property *demised; and that an account♬ [2] against the Central Company in the circuit may be taken between your crator and decourt of the United States for the eastern fendant, and that the amount may be ascerdistrict of Pennsylvania. The bill asked for tained that should be paid by your orator to an injunction to restrain the bringing of the defendant on any account whatever; more suits for rent. It gave a general history and that an accounting may be had beof the transactions between the companies tween your orator and defendant as to all the from the execution of the contract between matters and things set out in this bill." them in February, 1870, down to the time of The Central Company answered the bill, the filing of the bill, and it alleged the elec-denying many of the material allegations tion of the Pullman Company to terminate the lease under the provisions of the eighth clause thereof, and the willingness of the company to pay what should be found by the court to be equitable and right to the Central Company on account of the property which had been transferred by that company to it, and to this end it prayed the aid of the court. The bill also contained the following allegation: [141] And your orator shows that in said lease it is recited that the said contract of lease is made on the part of the defendant, the said Central Transportation Company, under an act of the general assembly of the commonwealth of Pennsylvania therein named, approved the 9th day of February, A. D. 1870, a copy whereof is hereto attached, marked Exhibit G, and referred to as part of this bill; but your orator is advised, and therefore submits it to the court, that the said lease being a grant, assignment, and transfer of all the

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therein contained. It denied that the Pull-
man Company had ever elected to terminate
the lease under the provisions of the eighth
clause thereof, and it alleged that the lease
was still in existence, and that it had the
right to recover from the Pullman Company
the amount of the rent named in the lease,
and that no valid agreement had ever been
made between the companies in any way al-
tering the lease or reducing the amount of
the rent payable thereunder. It denied that
the lease was illegal, and it alleged that even
if it were, the illegality did not justify the
complainant in applying for any equitable
relief whatever. Upon application on the
part of the Pullman Company the court
granted an injunction restraining the bring-
ing of suits for the collection of rent ac-
cruing after July, 1886. but it declined to en-
join those already pending for rent accruing
before that date.

After considerable proof had been taken

upon the issues involved in this suit and af- | foundation of any action or application for[144] ter the decision of the other case in this any relief whatever between the parties court, in March, 1891, holding the lease ille- thereto. And this respondent submits that gal and void, the complainant herein, on the the rule which precludes the granting of re25th of April, 1891, applied to the court for lief by any court of either equity or law, leave to dismiss its bill at its own cost. This upon a contract void for contravention of application was opposed by the defendant, public policy, forbade this circuit court to alwho, on the same day, moved for leave to file low such affirmative relief upon this cross a cross bill, in which it said it would avail bill which asserts no claim of right not itself of the tenders of relief made by the founded directly upon the express undertakcomplainant in its bill, and that it would ings of this contract of lease, held void by pray such relief in its cross bill as might be this court itself and by the supreme court pertinent to the case made by the bill. In for the reasons aforesaid." The Pullman December, 1891, complainant's motion for Company therefore denied that it owed any leave to dismiss ite bill was denied, and the duty to the cross complainant which was endefendant's motion for leave to file a cross forceable at law or equity to return to the bill was granted. Thereupon the cross bill Central Company the property assigned unwas filed, in which the Central Company ac-der the lease or to account for any profits deknowledging, under the decision of this rived under and by reason of any property court, that the lease in question was void, delivered to it under the agreement. 143]*claimed to avail itself of the tenders made in Testimony was taken under these pleadcomplainant's bill upon the subject of the re-ings, and the case came before the circuit turn of its property and compensation for court for final hearing, and that court held that which it was impossible to return, and that the cross complainant made out a case claimed, among other things, that the Pull- for an accounting by the cross defendant for man Company should account for all the the value of the property when received, toprofits which it had derived since the making gether with its earnings since, less the of the lease by the use of the property trans- amount paid as rent. The court therefore ferred to it under the agreement, and that referred it to a master for the purpose of asthe amount found due should be paid to the certaining the facts, with directions to report Central Company, and that the Pullman within the time named in the order of referCompany should be adjudged to be a trustee ence. Under this order testimony was taken for the Central Company of all the contracts and the master reported in favor of the Cenfor transportation, whether original, new or tral Company, and the exceptions filed havrenewals, held by the Pullman Companying been overruled, judgment was entered in with railroad companies with which there were contracts of transportation with the Central Company at the time of the making of the lease in February, 1870, and that the Pullman Company should be adjudged to pay the Central Company all such sums as should be due to it by the Pullman Company as such trustee, and that defendant should in the future from time to time account for the sums which should be due by reason of future operations under those contracts. It also prayed for a discovery and an accounting by the Pullman Company of its use and disposition of the property turned over to it by the Central Company.

favor of the Central Company for the sum of $4,235,044, together with costs. From this judgment the Pullman Company appealed directly to this court. It also appealed to the circuit court of appeals. The case was there argued upon a motion to dismiss the appeal, and the motion denied, and the further argument was postponed until some disposition was made of the appeal taken di rectly to this court. 39 U. S. App. 307. A motion has also been made to this court to dismiss the appeal, and thereupon an application was made to us for a writ of certiorari to the circuit court of appeals for the third circuit, and on account of the peculiar cirTo this cross bill the Pullman Company cumstances it was granted, and the record filled three demurrers, the first being a gen-has been returned to this court by virtue of eral demurrer on the ground that the cross bill was filed contrary to the practice of the court, and also that it appeared that the court had no jurisdiction of the case; the second demurrer related to the portions of the cross bill praying that the cross defendant might be regarded as a trustee and decreed to account accordingly; the third demurrer related to that part of the cross bill which asked for an account of profits since the making of the lease and for future profits.

The demurrers were overruled with leave to present the questions on final hearing, and the Pullman Company then answered the eros bill. Among other things it set up that the agreement in question was void, "and that being null and void between the parties hereto because of such character of the agreement, it cannot be made the lawful

that writ.

Messrs. Edward S. Isham, Joseph H.
Choate, A. H. Wintersteen, and Robert T.
Lincoln for appellant.

Messrs. Frank P. Prichard and John
G. Johnson for appellee.

Mr. Justice Peckham delivered the opinion of the court:

The motion to dismiss the appeal in this case is now before the court.

Counsel for the Pullman Company took the appeal directly from the circuit court to this court on the theory that the case involved the construction or application of the Constitution of the United States, because of the holding of the court below that the cause of action alleged by the Central

Company in its cross bill was under the cir- | the impossibility of returning a large portion cumstances a proper subject of equitable cog- of the property which it had received; it an nizance, and counsel claimed it was really nounced its willingness to make substantial nothing but a legal cause of action in regard performance of its contract contained in the to which the cross defendant was entitled to lease, and it asked the court to aid it therein a trial by jury under the Constitution of the by decreeing exactly what it should do for United States. There being room for doubt the purpose of carrying out equitably and in regard to the soundness of such conten- fairly its obligations incident to its termination, the counsel also took an appeal to the tion of the lease under the clause above mencircuit court of appeals, and we think that tioned. The other theory rested upon what by this action he did not waive any right of was a substantial allegation of the invalidity[147 appeal which he would otherwise have had. of the lease as having been made without auWhichever route may be the correct one, thority of law, and therefore in violation of either directly from the circuit court or the corporate duties of the Central Company, through the circuit court of appeals, it is un- and on that account not enforceable against necessary to decide, because the case is now the Pullman Company beyond the obligation properly before us either by appeal or by the of the latter company to make return of just writ of certiorari; and we therefore proceed compensation for the property demised. Upto determine it upon the merits. on that theory the bill asked, not that the court should set aside or cancel the lease, but that it should aid the parties by decreeing just what relief should be given by the complainant to the lessor in the execution of its duty to make some compensation for the property it received and which it stated its willingness to make, and to that end, that an accounting might be had and the amount ascertained that should be paid to Central Company in discharge of the obligations of the complainant in that behalf. Thus the Pullman Company came into a court of equity and in substance alleged that the lease had been terminated by it under the eighth clause, and it also alleged that the lease was void as ultra vires, and in either event it tendered such relief as the court might think was proper and fair under the circumstances.

The Pullman Company, complainant in the original suit, insists that it had the right to discontinue that suit at its own cost before any decree was obtained therein, and the refusal of the court below to grant an order of discontinuance upon its application is the first ground of objection to the decree herein. The general proposition is true that a com[146] plainant in an equity *suit may dismiss his bill at any time before the hearing, but to this general proposition there are some well recognized exceptions. Leave to dismiss a bill is not granted where, beyond the incidental annoyance of a second litigation upon the subject-matter, such action would be manifestly prejudicial to the defendant. The subject is treated of in City of Detroit v. Detroit City Railway Company, in an opinion by the circuit judge, and reported in 55 Fed. Rep. 569, where many of the authorities are collected, and the rule is stated substantially as above. The rule is also referred to in Chicago & Alton Railroad Company v. Union Rolling Mill Company, 109 U. S. 702 [27: 1081].

From these cases we gather that there must be some plain, legal prejudice to defendant to authorize a denial of the motion to discontinue; such prejudice must be other than the mere prospect of future litigation rendered possible by the discontinuance. If the defendants have acquired some rights which might be lost or rendered less efficient by the discontinuance, then the court, in the exercise of a sound discretion, may deny the application. Stevens v. The Railroads, 4 Fed. Rep. 97, 105. Unless there is an obvious violation of a fundamental rule of a court of equity or an abuse of the discretion of the court, the decision of a motion for leave to discontinue will not be reviewed here.

Upon an examination of the facts relating to the motion, we think the circuit court was right, in the exercise of its discretion, in denying the same. The original bill was framed really on two theories: One, that by reason of an election male under the eighth clause in the lease, the Pullman Company had terminated the lease, and it was therefore bound under its provisions to return the property which it had received from the Central Company. It stated in its bill


A large amount of proof had been taken under the issues made in this original bill and the answer thereto, and before the case was concluded the decision of this court was made in which the lease was declared to be void. The only obligation left under the original bill of complainant after the decision of this court was the obligation to return such portion of the property received by it as the court should determine to be right, or to make some compensation to the Central Company for the same. And this obligation it had offered in the original bill to carry out.

The Pullman Company had also obtained an injunction in the original suit, restraining the Central Company from commencing further legal proceedings to recover rent under the lease, and after obtaining this injunction and taking the testimony relating to the subject-matter of the original bill, the complainant should not be permitted under these circumstances to dismiss that bill and thus withdraw the whole case from the jurisdiction of the court, and thereby blot out its *tenders of[148] relief contained in its original bill grounded, among others, upon the allegation that the lease was void, and asking the aid of the court to decree the precise terms upon which its obligations to the Central Company might be fulfilled.

The denial of the motion was made in connection with the application of the Central Company to file a cross bill in which it would

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